more disciplined with wdiscount, they are managing the regulation they are dealing with. there's less capital to fund competition. investors will be receptive longer term. >> thank you for your time that does it for us here on the exchange we'll join scott in a minute on power lunch that begins right now. see you in a moment. i'm scott walker here is what's new at 2:00 the record rally rages on. the dow hitting an all time high since july our market panel weighs in on that the ceo of mcdonald's out after a consensual relationship the ceo is here to explain what's behind this under the radar retail boom. power lunch starts now

. let's look at where we stand in the markets the dow hitting a new high up 117 points the s&p and nasdaq all in record territory. >> earnings are driving the market highs it's getting rewarded. bob is at the new york stock exchange with more >> we're at new highs because the market has successfully rotated into former out of favor sectors. i'm talking about cyclicals. whatever happened to the global economic slowdown. those are the two classic cyclicals on a global level. communication services are media companies also doing well. even bank stocks doing well as the yields curve has steepened in the last month.

it's not just here in the u.s. i think a lot of people were surprised to find that europe is moving up. we had new highs in italy and germany and france there's your european etf. a lot of this is because the bank stocks have turned around italy, germany and france even japan at eight week highs. a little bit of this is about trade optimism a lot of people believe that will help the global earnings situation as well. fed with us as well. we had a little bit better economic data europe and over in china recently on friday that's going -- leading to a lot of people saying perhaps we need to look at the 2020 earnings will be below expectations maybe they are not maybe we can do a lot better that's fueling a lot of the optimism november is a good month

back to you. we have a quick news alert here steve is flagging some warning signs. >> thank vrs mus very much. the federal reserve out with its quarter. banks tightening credit standards for new credit cards and consumer loans and for commercial real estate loans these are small percentages tightening but it's going in the same direction but coming amid lower interest rates they have tighten credit for industrial loans reaching a three-year high and banks are becoming less likely versus the beginning of the year to prove credit cards for those with low credit scores. banks are siting low risk tolerance. concerns about repayment from borrowers for the tighter standards. scott. >> thank you despite recession fears swirling, billionaire investor leon cooperman said he's not worried about the market at all time highs >> the only place i saw euphoyea

was the ipo market that's been corrected. >> is it safe to buy at these record highs let's bring in jack and hugh johnson. what do you think about what he said are we fairly valuevalued? >> yeah, i would say we're pretty fairly valued we're starting to see a little rotation into sort of the outer favor areas. based on the earnings, valuations are -- i will absolutely agree with lee and say they are full.

would you be concerned as he might get a bit bothered about the market at that point # i think we're about 2% above the averages for the quarter i think he hit the nail on the head when he said it's not widespread i'll call it optimism. you don't have the levels of optimism that ordinarily characterize the end of a bull market believe me, if we had a significant move, the so called melt up in stock prices, we had a speculative surge and we got a big increase in optimism and became euphoria then i would say we're probably signaling the end of this bull market.

too much euphoria is not a good thing. >> they can get tall 3,000 is the target for the s&p that you have. you said it remains intact we're above that today do you need to start raising where you think stocks can go over the last couple of months >> i don't know. it's a year in number. we're only a month and a half or so away. i feel pretty good about the 3,000. we put that there at the beginning of the year. i think the market had followed the path we expected my sense is it will be hard to get a melt up. i just don't see especially with the headlines, the valuation and the earnings for next year are great for 2019, 2020 if we look much farther out, one of the things that we require is a 90% success rate in making money over a 7-year holding

period and historically that was really easy to do with the s&p now we can't do that anymore we had the take money off the mid year we're going to stay with our dry powder and use it as an opportunity to get in with a pull back. >> maybe you want to make the case that earnings have troughed and will only improve from here. that's a positive environment, is it not, jack? >> it is i will say that what we're seeing in the corporate profit activity over the last few quarters is beat of very low expectations and then very low number and tamp down expectations right now analysts haven't tamped down the next four

quarters they are still looking for high single digits. we will see that come down to mid single digits. i don't think that's a bearish sign >> they're going to be good for a while. they are good now. we see financials especially going to the top of the leader board. you see technology still performing well. we have seen a rotation back to the bull market sectors away from the safer sectors you've seen it in the credit markets. not only has the yield curve

become uninverted but quality spreads have narrowed. i say near term. i emphasize that you have to be optimistic but keep in mind the longest bull market in history, sooner or later this bull market will end and have a bear market and a recession. i don't think it will be a bad bare market or recession this will not grow to the sky. >> we'll leave it there. >> let me address the credit for a second >> if you could, quickly >> sure. we have seen enormous supply of corporate credit and the spreads don't compensate it very similar to what we saw we have shifted away from corporate credit to household credit a lot of marortgages we think household is in great

shape. mortgage probably of supplies. >> thank you mcdonald's shares lower after the company fired ceo steve easterbook for engaging in a consensual relationship with a subordina subordinate. only one firm downgrading the stock so far great to have you with us. >> why is this so disruptive when the guy taking over is steve easterbrook's men tetee. it's the guy he brought in and trained. he's been part of that push towards online ordering? >> it just changes the risk profile. feeling okay with how this went down is one thing. on a go forward basis it's totally different.

this is a big scale global brand. no one can come in and flip the switch and change the strategy anything that chris is going to do, that will be inherited over the 12 to nec 18 months in terms of menu and delivery and marketing and digital, et cetera the flip side of that is he's not easterbrook. he had his own leadership style and he also had vast amount of global operating experience. not to take anything away from kempczinski, he's been in the u.s. operations and a lot of the ideas have come from outside the u.s. >> do you see this as an opportunity for others, competitors to gain share? i don't think that mcdonald's has to lose for someone else to win.

you're in a franchise concept and they are doing well with the whopper and the chicken sandwich at popeyes it's good news versus not good news >> in terms of mcdonald's, do you see this as any sort of cultural problem when you heard about the chief officer leaving did you connect the two dots at all? are you getting any information from how you should read that? >> we are absolutely not saying that i think the easterbrook legacy when the book is final written will show he has laid the foundation of the digital footprint that will carry mcdonald's forward this is the way it had to be

handled. i think in that regard, we are not saying anything about the dominant brand equity global footprint of the mcdonald's that will carry forward we also just can't say that that momentum will continue forward just because leadership changes. >> if someone was to say, i'm not sure about this, maybe this sounds like somebody looking to downgrades the stock the stock has been broken later and this was to make the move today and have the excuse of easterbrook's leaving to do it >> i think that's fair assessment we did get that push back today.

the majority of times you have a leadership change of this magnitude, the stock will be flat to down the investor will not miss much by taking some off the table for the next 6 to 12 month period. i think it needs to be a much more proactive approach. while the stock did well, overall qsr is doing well and franchise concepts rerated from unloading all their stores during the last period, none of that changes in isolation this is about today's leadership change. >> thank you coming up, tech stocks have out performed financials and just about everything else this year up 37%. we'll hear from an analyst who says wall street banks deserve the same valuation as silicon valley tech giants

we'll have all of those details of his emotional case against warr warren's wealth tax. stay on power lunch. one of the products i helped develop at 3m was a more secure diaper closure. there were babies involved... and they weren't saying much. that's what we do at 3m, we listen to people, even those who don't have a voice. we are people helping people. (vo) thewith every attempt, strto free itself,pider's web. it only becomes more entangled. unaware that an exhilarating escape is just within reach.

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welcome back financials one of the best performing sectors out performing the broader market as rates rise mike mayo argues that banks should be valued more like tech companies. mike mayo joins us now to explain. nice to have you back. i mean, you have taken the get up a little too far now. first you slice the tie off on squawk now you got the hoodie we get it, you're partly a tech analyst. now you're going over board. you want banks to be valued the same as tech companies >> i'm a still bank analyst. you can't be a bank analyst without being a part-time tech analyst. maybe every third day i can wear this

year to date for our favorite name citigroup, bank of america and jpmorgan the bank earning streams are less risky, more annuity like because technology helped to keep costs in check and if you go back to historical relationships between roe and stock riprices banks would be 3 higher what's new we looked at one third of bank businesses and compared them to 13 tech companies. we said you know what, that one third of the bank business should be valued like the tech kpoens closer to a price-to-earnings ratio of 20. every company wants to be valued like a tech company. >> dominos at the forefront of their technology and mobile ordering they should be valued like that too and not a food or restaurant stock. >> i guess what i'd say is do

the math do the math. the technology firms grow three times faster the pre-taxed earnings growth for the last three years for the largest banks versus those tech companies has been the same yet those tech companies trade 50% higher >> the same as the tech companies? >> pre-tax earnings growth the same as the tech companies that trade 50% higher valuations revenues grow faster than expenses one reason is because of the motes around the bank businesses are under appreciated.

>> you sure you're not trying too hard you got out performs on the big banks. you love the stocks go up. >> this is not back normal banks. i was negative for 15 years, 17 years. look at the returns that banks are generating relative to their price to book ratios based on historical relationships they should be 30% higher just getting back to normal -- >> history including prior to the financial crisis >> absolutely. the last decade bank's performance was lousy. now it's good. you've crossed the line between

destroying value and creating value. once you create value, look at bank stock valuations during the prior preereriods you look at tech companies one third of banks are like tech they should get higher valuation or it shows intrinsic value and if you want to throw in there the greatest value investor of all time, warren buffet has this greatest overweight in u.s. banks. >> how about another warren? what about elizabeth warren or bernie sanders gets elected? >> there's political risks >> just a little >> up side, 30%. down side, it's there. we're still buyers in the big banks. >> all right good stuff good to see you. check out shares of boot

barn retail success story it's up 120% this year can the stock keep on kicking? we'll ask the company's ceo jus ahead. does your broker offer more than just free trades? fidelity has zero commissions for online u.s. equity trades and etfs, plus zero minimums to open a brokerage account. with value like this, there are zero reasons to invest anywhere else. fidelity. there are zero reasons to invest anywhere else. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

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welcome back uber gearing up for earnings after the bell its third release since going public the stock is a poster child for weaker appetite for ipos it's fallen 7% in a week we got about half a year's worth of history with this stock and it's not ban pretty picture. how are you viewing it right now? >> well you know as you mention it's hard to look at most stocks when they've only been public for six months or so this one is a little bit different. there are some definitive lines that we can keep an eye on you get above 35% as recent high

and the earnings can be a catalyst, that will be positive. it will give a lot more confidence in the name and squeeze a few shorts on the negative side, if you roll back over and the earnings are catalyst for a dive in stock and it drops below, it's 28.5, it's low since it went public of 28.5 that will be a problem i'm glad you mentioned the ipo market this whole thing with uber and lift and the whole blow up of wework will be very important. if we see a major break down over these earnings report that will have implications of issuers and banks to make a lot of money and the like. 2020 will be very dependent on the ipo market on how these stocks are reported the next few weeks. >> something approaching a little bit of make or break.

it's about a $50 billion market value. obviously there's not a lot of illusions this is a wonderfully powerful bid how do you view in terms of a forward going basis on this valuation. >> it's an unsustainable economic model as it's run right now. the great hope of self-driving cars is pretty much a pipe dream at this point. technology and the compliance liability issues are still very far away i think it's very difficult to imagine a strong fundamental case you have a lock up period coming up in two days lyft did better.

>> all right we'll see after the close today. thank you very much. head to our website or follow us on twitter back over to you ahead, boot barn soaring more than 120% this year was this stock made for buying we'll sit down with the ceo next teaching convicts to code. tyler is in san francisc sitting down with the founder o of a company that wants to get prisoners out of their cells and into silicon valley.

welcome back here is your cnbc news update. an advice columnist who has accused president trump of raping her in a new york city department store dressing room in the 1990s has sued him saying he defamed her calling her a liar whom he never met she's a long time advice columnist for elle magazine. the cdc is warn about a multistate sal moe nmonella out. it's a more severe strain than the typical ones eight people were hospitalized and one death has been reported. they have not identified the supplier of the tainted beef yet. a funeral was held today in detroit for long time michigan congressman john conyers who died last week at the age of 90. hundreds of mourners attended the service including former president bill clinton >> i remember, i think john

conyers the first person that ever quoted frederick douglass to me and saying power conceives nothing without a demand never did and never will he understood that thank you very much. take a look at the markets right now. we give you a check on the day when a dow hit a new high. s&p is higher. it's the russell that does about a 1% away or so. it cut revenue guidance for the rest of the year next strikyker is buyin inin iit medical. twilio lowering its earnings

outlook. it had already lowered that guidance once last week when it r reported results let's send it over to tyler. >> one place where it's been written is unlikely. it will be a million unfilled tech jobs in this country and a lot of them are in coding. the gentleman you're about to meet, a venture capitalist founded a group called the last mile which teaches convicts in prison in san quinton how to code and then gets them jobs how did the last mile start? when did it start? >> we started in 2010 and i was invite into the prison to do a talk to a group of men about

business and entrepreneurship. >> they wanted to learn. >> they wanted to learn. a friend of mine was doing some mentoring there. she said a lot of these guys have questions i can't answer. would you come in. my first reaction was no why would i want to go into prison i had never been there before. i believed the current perception about no hope, no path in prison i went in one night and i planned to do about a 30-minute talk that 30 minute talk turned into a three hour discussion. what i discovered is there's a lot of talent and desire of people inside who really wanted to build a better life after they served their time guys were handing me business plans they had been sitting on for a while because they had no one to give them to. that was the ah-ha moment of how it started and what we could do. >> these were felons some of whom were in for assault or weapons charges or gang related or murder, homicide.

>> everything. >> you taught them coding. how do you teach coding in a prison where there is no internet >> it's a big challenge. we can't have direct access to the internet the men can't. i say men today, we're in men's, women and youth facilities we had to create a simulated environment where they could actually have similar tools but not have direct access that's what we have today. >> how much graduates, so far, and where are they now in. >> we educated over 500. there's over 70 in the workplace today. mostly in california they are working for technology companies and non-technology companies but many of our recent grads who are now software engineers. >> you educated 500, 70 are in the workplace. where are the remainder? still in prison?

>> most of them are inside there's a period of time we educate before they get out. >> what is the average resid vichl rate >> it varies to 50 to 60%. they are coming back to prison that's a bad investment. >> what's the rate of those 70 are who are out in the workplace in. >> we have not had one person reoffend it's zero. >> some of them are making incomes of what to what? >> we have people in the valley that are making six figures. >> six figure salaries they have come out and learned a skill. they have put it to work they are not going back to prison how are you expanding are you expanding outside of california and into other states? >> today we're in five states. we're in 19 classrooms we're in indiana, kansas, oklahoma we just opened in michigan and our goal is to be across the

country in the nec several years. we want to be in 50 classrooms. >> who pays for this >> it's a combination of government but mostly private sector and foundations it was really important that we engage in this it's really a combination of some government funding but really more private funding. it's important for us to establish these public, private partnerships that would engage the business community >> thanks so much for being with us today congratulations on your good work back to you all. >> what an amazing story thank you. mpl we're sitting down with the ceo of boot barn tyler will miss out on this one.

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welcome back leon cooperman has been involved in a war of words with presidential candidate elizabeth warren about her wealth tax. earlier i spoke about his issue. >> i don't need elizabeth warren telling me i'm a dead beat and billionaires are deadbeats the vilification of bill naionas makes no sense to me the world is a better place. >> he didn't just criticize elizabeth warren either. while he said he is happy with president trump's performance on the economy, he disagrees with some things the president has

said i asked him if he would support president trump's re-election. >> he has to become a president for the entire country and not just his base. if i was him, if i'm not prepared to change my behavior, i would take a victory lap and not run again. >> the most striking thing is how emotional he became during part of it watch. >> it's obvious people cannot only see the emotion on your face but hear it in your voice when you talk about this why? >> i care. that's it. >> our wealth editor has been closely following the cooperman warren back and forth. i don't know how he could make his case that he cares anymore

than that by his outward emotion on the screen. >> it was incredible interview i urge every one to watch the whole thing. what surprised me about this also is what really made him cry wasn't the fact he has to pay a wealth tax which is what every one on twitter is saying what made him cry is the country is being torn apart by divisive language on both sides he said i'm willing to pay more. i believe in a progressive tax system, i believe the wealthy should be doing more but the wealth tax is not the way to do it >> he -- it's hard not to defend who he is based on the fact that i've gotten to know him. we all kind of have. he's been a fixture on this network. i think all of us know what he does in terms of trying to lift people up. this conversation really is about that at the end of the day. it's about trying to make capitalism open to everybody and having it maybe it does need to

be fixed but give everybody a chance to be as successful as he is who he wrote about and spoken on the issue. he's giving his money away he has the college scholars. he believes in access to opportunity as much as anything else he's doing his part. he said it himself elizabeth warren is picking on the wrong person here. >> it seems like the debate isn't how to make capitalism work for everybody how to lift, how to close that wealth divide that affects our country. i don't think it's about whether or not to have that wealth divide but how to do it and their approaches are very different. he made clieear, i'm going thin but i would like the give away my own money and not have the government give it away. >> he had this terrific quote that said what is your fair of what someone else has worked for.

that's number one. elizabeth warren said you didn't build that the school teachers that taught you, the roads that were built, bri bridges, the infrastructure that allowed you to become a billionaire that's what made you. there's no such thing as self-made billionaire and you need to give back a lot. that's the argument the country is having and that's why i think he quoted jack kemp of saying americans admire the wealthy, they want to be them i don't know if that's as true today certainly in the democratic primary season as it was years ago. >> this whole issue around these two words of fair share are really the lightning rod when it comes to this conversation because as cooper mman says fai share, i'm giving away everything i've done everything to be a success and give back. what is fair share >> should he be making decision about how the billions are spent

or should the broader public be making the decision. to argue that billionaires should get more and control the way it's spent as opposed to giving their tax tldollars to a country that will democratically decide, they may not have the same priority. people saying i'm giving back doesn't really cut it because that's not truly the way democratic wealth should be distributed. that's the argument on the other side very few people have done as much as him and the people he named to improve the lives of those at the bottom. >> there's part of this conversation and this snark on the other side of it is you say you're so charitable and you give so much money so you think you deserve a break or you want sympathy or praise that's not what any of this conversation is any way about. >> he's only saying these things because he's forced to at this point. he's being called a deadbeat

>> more to come. >> it was great interview. we're going to continue our coverage with the war on wealth with marcus he monois. he will be with us for the hour ahead of his newest season of the profit that's ahead at 2:00 rick is tracking all the action hey, rick. >> what an interesting day look at when we charted two year yields are moving up minicely rates might be moving hire for longer look at a july start we're getting back to that zone. anything above one and three quarters the last closing high was 190. rating are going up. tens are up six. 30s are eight double what tens are on a net change for the day. the curve steepening

it's basically the steepest since the end of july hovering a whisker under 20 basis points. over the last month or so, we have gone from seven and ten securities to only six and ten it's starting to windddle down. you may not know about boo barn, but that stock is up the company ceo about to joins u. y'all come back now, ya hear ♪

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while most brick and mortar stores are struggling, boot barn has been riding high the western apparel retailing caught the eye of wall street. third in khocowen's top picks. now with us is the president and ceo of boot barn >> glad to be here appreciate it. >> in terms of competing, is it

just that you have such a specialty that you don't really have to worry about amazon coming in and selling boots, for instance >> sure. we have a lot of competition, of course and amazon does sell boots and virtually all the brands we carry except for our exclusive brands could be found on amazon. i think what separates us is a boot is really a store preferred purchase the fit is very complicated on the western side and on the work side often our work customer wants to put that boot on and get right back to the job site so we have a bit of a competitive mode against a pure e-commerce player. >> do you have a direct to consumer sort of digital strategy in place. >> we do 17% of our business right now is e-commerce it's been growing quite nicely so have our stores we've had some nice same-store sales growth >> manufacturer in china largely? >> about half of our product is manufactured in china. some in the united states and

some scattered throughout the world. >> what's been the impact from the trade war and tariffs and how do you deal with it? >> we've been able to offset much of the tariff issue what we've been able to do is as the leader in the industry, we have more negotiating power. we have some pricing power and we also have the ability to shift from our third party vendors to our exclusive product and get about ten points more of ma gin by doing so in the most recent quarter, we expanded greatly our exclusive brand penetration. and that has pretty much extinguished the tariff issue for our fiscal year which ends in about six months. >> do you worry about not being able to offset them? could have a more punitive impact on a company like yours >> a tax to the consumer i think as it relates to boot barn and our industry, the tariff won't make boot barn uniquely less competitive. you could argue it would give us an advantage over the guy that

we compete against mostly which is a mom and pop that doesn't have the leverage we have and doesn't have the ability to shift to exclusive brands. but setting all of that aside, we prefer a non-tariff environment going forward. >> how affected are you by the slowdown in the economy? what percentage of your purchases are must buys? >> that's a good question. a big portion of our business is functional in nature so ranching, farming, oil, lots of industry. but we're quite diversified. now we're in 33 different states so if one particular part of the economy starts to soften, it'll be hopefully buoyed up by another top of the economy >> what's your top selling boot? >> we sell a broad square toe leather boot and we sell very basic products. boots that guys or women will work in, ride horses in, work in a farming industry or environment, and they wear through the product and come back and buy another boot

similarly. so we often bring fashionable looking product but what pays the bills is brown boots, denim, work jackets >> and that's $180 >> yes >> thanks for being here >> thanks for having me. >> and thank you for watching "power lunch." scott, thanks for joining us today. >> "closing bell" starts right now. it does. scott and melissa, thank you i'm brian sullivan in for wilfred frost again today. welcome to "closing bell." we are at the post of the stock of the day that is under armour they're facing a doj and s.e.c. inquiry. what exactly went wrong at one of america's formerly fastest growing consumer companies we will dive in. >> and i'm morgan brennan. let's see what's driving the action for this today. lack of bad news around china as the trade continues to fade into the background from ferrari to berkshir